Are you using your HSA the right way?

If you're the owner of a HSA, you probably know the benefits of your account already. You've even made a mission to max out your contributions so that you can either invest the cash, lower your taxable income or save it for a rainy day.

However, are you using your HSA the right way? Yes, there can be a right and a wrong way to use the account — one that's right or wrong for your individual situation. You want to be able to use your HSA to maximize your life and, by extension, your financial life.

Are you interested in a safety net?

As cheesy as it sounds, there's no such thing as a guarantee. And the same goes for work. Let's say you're self-employed — meaning your paycheck varies from month to month and you're enrolled in a HDHP. Ideally, you will have enough money each month set aside to pay your health premiums and prescriptions.

What happens though, when you're relying on a big payment from a client and the check gets lost in the mail?

Delays in payment is super stressful (trust me, 99% of freelancers will most likely tell you stories related to client payment woes) and your HSA can come in handy. Let's say you have a sizable chunk of cash in there and you want to pay for a doctor's visit just that month. That's what it's there for, right?

In this case, it makes sense because you're using your HSA as an emergency fund of sorts, so that you don't need to whip out a credit card to pay your bills. As in, you may risk not being able to pay the credit card in full by the end of the month leading you to get in a bit of debt.

Even if you're not self-employed, using your HSA for doctor's visits can come in handy. For example, maybe you had a bike accident and had a deep cut on your leg. In this case, you can take your HSA funds out since you're only down to a few hundred dollars in your regular checking account by the time your medical bill shows up.

You decide to negotiate with the hospital, setting up a payment plan and then paying your bills each month as part of your paycheck goes to your HSA. You can still afford all the other expenses in your life, so this is a fine option. Some people may take the money out from their HSA (assuming there is enough) and later in the year contribute more to their account.

Does an HSA make more sense than supplemental insurance?

An HSA can be helpful if you decide you want to plan for occasional medical expenses. For example, let's say you were debating whether you want to pay for dental insurance versus contributing money to your HSA and using those funds each year.

You comb through your previous year's expenses and notice that you only went for two checkups per year, including teeth cleaning. Upon more reflection, you believe your teeth are in pretty good health and that's it's cheaper to forego dental insurance and just pay for teeth cleaning out of pocket.

(To be clear, we're not advocating you forego dental insurance or making recommendations on how you should handle your benefits enrollment, we're simply outlining that situations can vary.)

Or you were debating whether or not to contribute more to your HSA funds because you want to complete a vision exam each year. Your family happens to have a history of eye disease and you want to make sure you get all possible risks check out. Opting for vision insurance and supplementing with your HSA for things like glasses or eye drops makes sense, because it may be cheaper to pay for vision insurance since if could lower the cost of your specialized eye exams.

Can you afford to invest your HSA funds?

Let's say your goal is to invest as much money as possible. You want to be able to max out all your retirement accounts — and you can afford to do so. Instead of using your HSA funds only as a way to pay for qualified medical expenses, you use it to invest in mutual funds and other types of assets.

Since you're a great saver, you open up a regular savings account for the sole purpose of using it as emergency medical fund. When you break your glasses and need new ones, you can opt to pay for it using that savings account instead of your HSA.

If you don't have the funds to do so, or your goal isn't to max out your retirement funds, you don't have to do any of the above, especially if you're going to stretch your budget too thin.

How will you use your HSA?

Bottom: there's no right or wrong way to use your HSA as long as you follow the rules. What's important is that you assess your situation carefully and make a choice that can help you save time, money and unnecessary stress. (Not to mention avoidable health concerns.) After all, an HSA is supposed to help you be healthier, right?